The approval of Taka 860-billion Annual Development Programme (ADP) for the upcoming fiscal 2014-15 by the National Economic Council (NEC) at its Tuesday's meeting with Prime Minister Sheikh Hasina in the chair, marks the completion of the substantial part of the budget-making exercise by the Finance Minister. The main task of this exercise now at this stage will be the finalisation of the resource mobilisation programme and allocation of funds for different ministries and their relevant affiliated bodies, for meeting their recurring (both current or revenue and non-development) expenditures. Ensuring the availability of resources for funding the ADP, after meeting the revenue expenditures that have otherwise been bulging over the years and footing the bill for other non-development current expenditures, is the main challenge before the Finance Minister.
Meanwhile, the proposed ADP for the next fiscal year (FY) that will be about 32 per cent higher than the revised one for the current one, in its financial size, does reflect the priority of the government for raising the level of public investment in different sectors. These include transportation, education, power, physical infrastructure, water supply, public housing, rural development and institutions, agriculture, health, nutrition, population control, family welfare etc. There is no debate over the needs for increasing public investments in such sectors, considering their critical relevance to meeting the national development goals and objectives.
Furthermore, there is also no denying that the economy, at its current stage of development, needs a big push in public investment when private investment is showing a sluggish trend. Efficient use of public investment funds can have a positive impact on private investments if the former, in qualitative terms, helps 'crowding-in', not 'crowding-out', the latter. There are lots of things to be done for the purpose. The capacity for execution of ADP projects has to be strengthened. The focus has to be unmistakably placed on timely completion of the major on-going projects without leaving scope for cost over-runs. Resources should likewise be made available for ADP projects without generating pressures on macro-economic management or strains on the price situation. The ADP projects, therefore, need to be prioritised under a sound economic rationale. Inclusion of non-essential projects to accommodate the pressures of the vested political interests has to be avoided so that resources are not thinned out to cover an unmanageable kit. Technical assistance projects should also yield the desired results. In tandem with all such actions, there must be more vigorous efforts for utilisation of external resources from the 'aid pipeline' because such funds are less costly and their optimum utilisation can make Bangladesh's case stronger for obtaining new aid commitments by multilateral and bilateral capital donors.
The points that have been noted above merit an urgent attention in view of Bangladesh's unsavoury experiences with ADP implementation, pruning its size substantially through its revised version, year-end rush for release of its funds following earlier slacks in implementation etc. Such problems must be overcome with determined efforts, if the ADP is to serve its intended goals and meet its stated objectives. Here, the size of the ADP should not be a matter of controversy in view of the facts that the country's economy has expanded in size and the ratio of public investment to its gross domestic product (GDP) is still low -- at about 5.5 per cent. What matters most is the quality of public investments so that the capacity of the national economy to help support its sustained, accelerated growth performance is strengthened. A physical performance matrix for execution of ADP projects and arrangements for its routine, periodic reviews to relate inputs with outputs and to assess their effectiveness, in terms of costs and benefits, need to be institutionalised on a priority basis.
